Q - What is value capping? Customers can still write cheques of above the limit It’s a limit set on amounts. The limit set for value BUT his /her bank will take them through a process capping is Kshs 1million, USD 35,000 EUR called collection meaning that payment rests with 30,000 and GBP 15,000 and above that will NOT the paying bank, subject to a maximum period of be processed through the Nairobi Automated 21 working days. Clearing House from 1st October 2009. Q-Does value capping also include Bankers Q - What is RTGS? Cheques? Value capping will affect all cheques, including Real Time Gross Settlement (RTGS) System Central Bank of Kenya banker’s cheques and corporate cheques. & known as the Kenya Electronic Payments and Set- Kenya Bankers Association tlement System (KEPSS) is a settlement system in Q - Does Value Capping apply on all payments? which processing and settlement take place on a Value capping applies on all payments to and from other banks and does not affect in-house cheques transaction-by-transaction basis (without netting) i.e. cheques of the same bank. in real time (continuously). VALUE CAPPING ON KEPSS system was implemented on July 29, Q- Are payments through RTGS safe? 2005 by the Central of Kenya in consultation with Payments through RTGS are made Via the SWIFT CHEQUES, DIRECT Kenya Bankers Association. The system can han- dle both high value, time critical payments and (Society of World Wide International Funds Trans- DEBITS AND EFT’S low value payments. fer) network, which is a safe money transfer net- FAQs work. This is a channel that facilitates immediate All Commercial banks are currently participating transfer of funds and information in a secure chan- in KEPSS and are able to provide this service to all their customers in all their branches. Custom- nel. Queries ers will be required to directly instruct their banks to make payments to the receiving banks instead Q - How is RTGS different from the cheque pay- For any queries please contact of issuing cheques and it is anticipated that the ment system? The NPS Division receiving bank would have the payment within A cheque is a debit instrument whose payment is Central Bank of Kenya, four hours after receiving the instructions on due deferred i.e. will take place in future in Kenya is T P O Box 60000 - 00200 date. + 3 working days; that is a customer will receive Nairobi, value after three working days. RTGS operates on a KENYA, Q - Which payments are effected by this direc- credit push i.e. the customer/payer must have funds Email: [email protected] tive? in his account at the time of issuing the instructions Telephone Number: All large payments in local and foreign currency for payment. +254 20 2861127/30/09/31 settled by Cheque, EFT, Standing orders, Direct Fax: + 254 20 2224406 debits that pass through the clearing house. Q- What are the requirements RTGS? Web: www.centralbank.go.ke To make a KEPSS payment one requires: Benefici- Q - Can customers still write cheques of above the ary name, Beneficiary bank and branch, Benefici- cap limits? If yes, how will that be handled by the ary account number, value date of payment, bank? amount and sender/receiver information. Q – How does this change impact statutory pay- Yes. It is expected that the receiving bank will ments like P.A.Y.E and V.A.T? credit the account of the beneficiary instantly. If the Q- What evidence do I receive that I have made A – It affects large statutory payments which are money cannot be credited for any reason, the re- an RTGS payment? Your bank will provide you with a slip that is done to CBK and hence these payments shall be ceiving bank would have to return the money to the duly signed and stamped as is currently the pro- done via RTGS in your commercial bank. remitting bank within 2hours. cedure for cash or cheque deposits. Q- Payment to Customs for clearance of goods is Q- Can RTGS payments be effected through other Q – What is the difference between EFT and RTGS? normally done through Bankers cheques as per agents other than commercial banks? EFT is an electronic fund transfer modes that requirements. How will this process be handled? No. only through licensed commercial banks. operate on a deferred net settlement (DNS) ba- Payments to Government bodies will also have to sis which settles transactions in batches. In be routed through RTGS if amount is greater that Q- When can a customer make RTGS payments? DNS, the settlement takes place at a particular Kshs 1 Million and your bank will provide you RTGS payments can be made during the business point of time. All transactions are held up till with a slip (evidence) of payment made. day Monday to Friday between 8.45am and that time. For example, EFT settlement takes 3.00pm; however these times will vary with each place once a day at the automated clearing Q- A bounced cheque gives a beneficiary commercial bank. house. Any transaction initiated after a desig- “physical” evidence of non-payment by drawer nated settlement time would have to wait till the and helps in lawsuits. Does RTGS take care of Q- Can RTGS payments be back-dated? next designated settlement time. Contrary to this aspect? No, but they can be future dated. this, in RTGS, transactions are processed con- In RTGS a payment cannot bounce since it’s a tinuously throughout the RTGS business hours. credit push i.e. the customer must have sufficient Q – Can customers effect payments for less than funds at the time of initiating the payment. the cap limits via RTGS? Q- Which foreign currencies can be transacted Yes customers can issue instructions for any through RTGS-KEPSS? Q- Under what circumstance can a bank reject or amount below the value cap via RTGS Currently US dollars, Sterling Pounds and EU- not apply a payment received through RTGS? ROS and the value cap limits apply. A bank may not apply a payment if the benefici- Q – What are the charges for receiving RTGS pay- ary details are different from records held or there ments? Q - What benefit are derived by using RTGS? has been notification of fraudulent activity. There are no charges on receiving RTGS payments. A – The benefits include; reduced high value KBA recommends RTGS payments to cost same as cheque frauds, faster receipt of funds by benefi- Q - Would the remitting customer get back the Bankers’ cheque and NOT exceed Kshs 500.00 ciary same day value i.e. within 4 hours of initi- money if it is not credited to the beneficiary’s ac- ating the instructions it is efficient and settle- count? When? ment is guaranteed. .